Solana Beach water district rate increase starts Jan. 1

Joe Tash

A last-minute attempt to roll back a 6 percent rate increase set to take effect Jan. 1 for customers of the Santa Fe Irrigation District failed on a 3-2 vote of the district’s board of directors at a meeting on Thursday, Dec. 20.

Two newly elected board members, Greg Gruzdowich and Alan Smerican, took the dais for the first time at Thursday’s meeting, but they split on the issue of reconsidering the rate increase, which was approved at the board’s November meeting.

Gruzdowich proposed holding a special meeting to consider eliminating, reducing or postponing the planned rate increase, but his motion was voted down by directors Michael Hogan, Andy Menshek and Smerican. Gruzdowich was joined in voting for the effort by director John Ingalls, who cast the lone “no” vote on the rate increase last month, before former directors Ken Dunford and Robert “Bud” Irvin stepped down.

Over the past six years, the district has raised rates 74 percent, including the 6 percent increase for next year. District officials said in November that the latest rate hike was needed to cover an anticipated 3 percent increase in the cost of water purchased from the San Diego County Water Authority, as well as helping to pay for projects in the district’s 10-year, $60 million capital improvement plan.

The district serves 22,000 customers in Rancho Santa Fe, Solana Beach and Fairbanks Ranch.

District general manager Michael Bardin has said other water agencies in San Diego County have experienced similar rate increases in recent years, and that Santa Fe’s rates are still in the bottom one-third of local agencies.

A staff report presented to directors in October noted that a 10.1 percent rate increase would be needed in 2013 to fully fund the district’s capital improvement program.

At Thursday’s meeting Gruzdowich questioned why the district can’t reduce operating costs instead of raising rates.

Hogan said the district has been working on cutting its costs over the past year. Those efforts have included staffing reductions and the board’s approval of reduced retirement benefits for new hires.

“I made myself clear (in November),” Hogan said. “Six percent was the lowest we could go without falling into a deeper hole.”

Menshek said he wasn’t willing to “pull out the carpet from under staff” just before Christmas, when the board and staff have been working on the budget and rate issues for most of the past year. Both Hogan and Menshek, however, said they are willing to look at additional cost saving measures in coming months.

Ingalls said he had not intended to initiate a reconsideration of the rate increase, because he had his say against the board’s decision in November.

“When the board votes, you salute the flag, you go forward,” he said.

But with new board members taking their place, he said, he was willing to support Gruzdowich’s motion.

In other action, the board re-elected Hogan as president, and designated Ingalls as vice president.

The board also directed staff to come up with a formal policy on how directors can place items on the board’s agenda. Staff will draft a policy that will be considered by the board’s executive committee, and then be brought to the full board for consideration, said Bardin.

The issue arose when Gruzdowich contacted Bardin before the meeting to request that three items be placed on Thursday’s agenda: reconsideration of the Jan. 1 rate increase, an exploration of consolidation with neighboring water districts, and a proposed change to the district’s policy of providing medical and dental benefits to directors.

After consulting with board president Hogan, Bardin placed an item on the agenda regarding the process of director requests for agenda items.

The district’s general practice in the past has been for directors to bring up potential agenda items during the director’s comments portion of a regular meeting, said Bardin. If the board had a consensus on considering the issue, he said, it would be placed on an upcoming agenda.

In the case of Gruzdowich’s request, Bardin said, he did not feel the district had a clear policy on the handling of director requests for agenda items, and decided to seek further direction from the board.

The board will discuss the consolidation issue at a meeting in February, and will take up with health benefits issue during an annual review of director compensation next year. Gruzdowich said he will not take per diem payments for attending meetings as allowed by district policy, and has also declined health care coverage, and wants to see if other directors will join him.